Vannessa targeting Venezuela through World Bank Group

Vancouver – The continuing battle over rights to the Las Cristinas gold project in the Kilometre 88 region of southeastern Venezuela has now seen Vannessa Ventures (VVV-V) formalizing its arbitration procedure against the Venezuelan Government.

The company has registered its Request for Arbitration against Venezuela through the International Centre for Settlement of Investment Disputes (ICSID), part of the World Bank Group.

Vannessa Ventures alleges that its contractual rights to develop Las Cristinas were expropriated by the government. Vannessa’s 95%-owned subsidiary, Minera Las Cristinas (MINCA), contests that it still holds the development rights to the proposed mega gold project. The Venezuelan government and its agency Corporacion Venezolana de Guayana (CVG), which owns 5% of MINCA, are being called to the carpet by Vannessa who claim the actions taken contravene the Bilateral Investment Treaty in place between Canada and Venezuela.

The company outlined that it feels the expropriation was conducted without due process and in discriminatory manner. Further, Vannessa cited no timely compensation for the actions.

In referencing the Bilateral Investment Treaty, as part of its application to ICSID, Vannessa seeks restitution through the return of its contractual rights to develop Las Cristinas and all confiscated property, plus monetary damages of US$50-million plus interest. Alternatively, in lieu of the above restitution, it seeks monetary damages of US$1.045-billion plus interest for out-of-pocket expenses of about US$180-million, incurred by previous operators including Placer Dome (PDG-T), and for lost profits of US$865-million.

The World Bank’s ICSID was first established in 1966 to facilitate the settlement of investment disputes between governments and foreign investors.

The Las Cristinas project is presently under control of Toronto-based Crystallex International (KRY-T) that have completed a feasibility study on the gold deposit and plan initial production in 2006, at a rate of about 300,000 ounces per year.

Vannessa Ventures acquired Placer Dome’s Venezuelan operating company and all associated assets in 2001. The Venezuelan Government, through CVG, has refused to accept the sale by Placer Dome to Vannessa, rejecting it outright. The points of contention between the opposing groups show little signs of abating and will likely continue for the foreseeable future.

As of the latest figures, Vannessa Ventures reports 75 million shares outstanding giving a market capitalization of about $30-million at its recent trading price of 40 per share.